Baxter (BAX) Inks Partnership with Americares, Stock Down

Headquartered in Deerfield, IL, Baxter International Inc.BAX, a global medical technology company, announced a new oral health project in collaboration with Americares, a health-focused relief and development organization. Notably, share prices lost 4.1% to close at $44.76 following the news.

The project is formally known as The Americares Oral Health Project and is exclusively formulated to enhance the capacity of 30 Americares partner clinics in delivering better oral hygiene conditions, especially to the uninsured, underinsured and low-income patients. Notably, Baxter would fund the year-long project with a grant of nearly $75,000 to Americares.

Meanwhile, the current market trends of Baxter represent lucrative sentiments as it promises a solid one-year return of almost 18%, much better than S&P 500’s roughly 4.9% over the same time frame.

In the past six months, Baxter has outperformed the Zacks categorized sub industry trend with respect to price performance. Notably, the company represents a positive return of 3.71%, much better than Medical Product industry’s return of -4.47%.

Additionally, a positive estimate revision trend for the stock for the current fiscal buoys optimism, as eight estimates moved upward in the last two months. The company’s current year estimate has risen by 19 cents to $1.91 over the past two months.

Coming back to the deal, the project includes a webinar series known as ''Train the Trainer'', created in partnership with the Institute for Healthcare Advancement. The project aims to promote oral health education and further introduce preventive measures in a primary care setting. Per management, the launch of the oral health initiative aims to improve and address issues related to dental care in the U.S.

Meanwhile, the project would consist of training and resources pertaining to oral health topics. Notably, all the training sessions will be available on SafetyNetCenter.org – Americares’ open source library.

Our Take

Baxter operates in the life-sustaining and critical care products category that is cushioned against sudden economic downturns. We believe the latest development will fortify Baxter’s position in the oral health care market, which is estimated to have a worth of about $34.8 billion globally (Statista).

We are also upbeat about the company’s third-quarter 2016 earnings results which steered past the Zacks Consensus Estimate on both counts.

Additionally, the stock promises a solid long-term expected growth of 12.31% and has an earnings yield of 4.09%, much better than the industry’s yield of 1.38% over the same time frame.

HMS Holdings has a long-term expected growth rate of 14.26%. Notably, the company has a solid one-year return of roughly 42.5%.

Medidata Solutions has a strong one-year return of roughly 19.5%. The stock represents a long-term expected growth rate of 22.33%.

IDEXX Laboratories represents a solid one-year return of almost 68.2%. The company has a long-term expected growth rate of almost 14.96%.

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